Need Help on Loans!

[surgical]

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Hi, right now I am in the process of filling out my master promissory note. I am at the part where it asks if you want to pay unsubsidized interest while in school. If I say yes how does it work? If I say no how does that work? 😕

 

[28657]

I'm pretty sure this only concerns unsubsidized Stafford loans. Subsidized loans are called that because the government "pays" your interest for you while in school.

If you say yes, then you have to pay the interest while you're in school. The payment (which is the interest accumulated for the month) depends on how much your loan is for. A lot of students don't do this because they're getting loans for a reason (i.e. they don't have extra money!) If you say no, then you don't owe any student loan payments until you graduate. But this means that interest will accumulate/compound in addition to your principle.

 

[Glycerin]

I'm pretty sure this only concerns unsubsidized Stafford loans. Subsidized loans are called that because the government "pays" your interest for you while in school.

If you say yes, then you have to pay the interest while you're in school. The payment (which is the interest accumulated for the month) depends on how much your loan is for. A lot of students don't do this because they're getting loans for a reason (i.e. they don't have extra money!) If you say no, then you don't owe any student loan payments until you graduate. But this means that interest will accumulate/compound in addition to your principle.

Maybe it's different for pharmacy school loans, but for undergrad, I have both subsidized and unsubsidized loans. I've had loans for over two years now, and I've not had to pay a single payment. The way it was described to me was that in a subsidized loan, my interest begins after I graduate. In an unsubsidized loan, my interest begins from day one.

 

[jdpharmd?]

Maybe it's different for pharmacy school loans, but for undergrad, I have both subsidized and unsubsidized loans. I've had loans for over two years now, and I've not had to pay a single payment. The way it was described to me was that in a subsidized loan, my interest begins after I graduate. In an unsubsidized loan, my interest begins from day one.

That's exactly what amanda was saying. You don't even have the OPTION to pay your interest on a subsidized loan while you're in school because there is NONE. It's best to pay your interest on unsubsidized loans so that you don't have to pay interest on that interest once you start paying the loans back after graduation. The downside is that you're borrowing money for a reason, so it's not always easy to come up with the interest payments while in school.

 

[28657]

Maybe it's different for pharmacy school loans, but for undergrad, I have both subsidized and unsubsidized loans. I've had loans for over two years now, and I've not had to pay a single payment. The way it was described to me was that in a subsidized loan, my interest begins after I graduate. In an unsubsidized loan, my interest begins from day one.

Mmm hmmm, that's what I said. 🙂

 

[Glycerin]

Mmm hmmm, that's what I said. 🙂

This is why I made the comment I did:

If you say yes, then you have to pay the interest while you're in school. .

Based on that statement (and the phrase "have to pay"), I thought that maybe you were saying that unsubsidized loan interest must be paid while in school. Reading that, I wasn't sure if I had misread or if things were different for ungrad/grad. That's all. 🙂

 

[jdpharmd?]

This is why I made the comment I did:

If you say yes, then you have to pay the interest while you're in school. .

Based on that statement (and the phrase "have to pay"), I thought that maybe you were saying that unsubsidized loan interest must be paid while in school. Reading that, I wasn't sure if I had misread or if things were different for ungrad/grad. That's all. 🙂

😕
She IS talking about unsubsidized loan interest. If you indicate that you will pay it (by "saying yes"), then you have to pay it, during school.

 

[Glycerin]

😕
She IS talking about unsubsidized loan interest.

I understand that. I just realized that I had misread the original post. I read it as the person was being asked on the form if he/she wanted to take out an unsubsidized loan. I know now that it said "do you want to pay on the interest" or whatever (I don't have the screen in front of me, so I'm paraphrasing.) Hopefully, there'll be no more confusion. 🙂

 

[surgical]

Thanks for all the imput....Well if I say yes that I want to pay interest while in school, how are the payments going to be like? Are they monthly? Also, what can I expect to pay if I borrow around $23,000 (unsubsidized) each year for 4 years if lets say the interest is around 8%. Would it be 8% of $23,000 which equals $1840 for the first year? And 8% of $46,000 for the second year? Does anyone know?

 

[jdpharmd?]

Thanks for all the imput....Well if I say yes that I want to pay interest while in school, how are the payments going to be like? Are they monthly? Also, what can I expect to pay if I borrow around $23,000 (unsubsidized) each year for 4 years if lets say the interest is around 8%. Would it be 8% of $23,000 which equals $1840 for the first year? And 8% of $46,000 for the second year? Does anyone know?

If it's 8%, I would look for another lender. I'm at 2.82% currently. Heck, I've seen credit cards for 4.9%!

 

[surgical]

I just said 8% because that is the highest it can get, a worst case scenario.

 

[henderson]

Since you guys are on the topic of student loan, let me ask you guys this. I am in the process of getting a private loan from bankone since we are not eligible for federal loans, and I have 9.5% origination fee, which I think is the interest which will accrue on the total loan I receive. Is the interest on the private loan generally this high?

Also, people from NVCP, were you guys able to apply for federal loans now that school is accredited?

 

[dontworry]

9.5% seems really high.. Maybe you should think about a cosignor/co borrower? With a cosignor with good credit, you will get a better rate. When i applied for loans, i originally qualified for a 3% dispersment fee, then 6% interest or something bad. Had a little talk with the parents, and my dad agreed to cosign. Since he had excellent credit, i dont have any origination/dispersement fees and the interest will be prime -.5%. I used Sallie Mae signature, since after 2 years of ontime payments that cosignor is released if you have decent credit.